Digital Currency Group (DCG) has taken an important step towards resolving the allegations raised in Genesis' bankruptcy, according to a court filing released today.
Digital Currency Group (DCG) Approaches Settlement to Resolve Genesis Creditors' Claims
Agreement in principle between DCG and Genesis creditors could pave the way for recoveries ranging from 70% to 90% in USD equivalent for unsecured creditors.
On a kind basis, recovery rates are projected to be between 65% and 90%, depending on the value of the digital assets involved. These estimates are subject to market pricing and precise documentation.
Facing financial turmoil following the collapse of the FTX exchange, Genesis stopped withdrawals from its credit arm in November of the previous year.
The company then filed for bankruptcy protection earlier this year. In a letter sent to DCG shareholders last month, it was stated that the company was on the verge of reaching an agreement in principle to handle the allegations in the lawsuit.
Digital Currency Group, recognized as the parent company of CoinDesk, has formulated a partial refund arrangement to address its current liabilities.
This included approximately $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured note due in 2032.
The designed strategy consists of two tranches: the first is approximately $328.8 million with a two-year maturity, and the second is $830 million with a seven-year maturity.
In addition, DCG has committed to make four installments of $275 million in total after the date of the partial repayment agreement, with maturities of May 2023, corresponding to unsecured loans of $630 million.
*Not investment advice.
